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AMP Bank has revealed a new digital bank that is aimed at supporting business customers, as well as everyday banking clientele.
While lending isn’t attached to the service yet, AMP Bank CEO Sean O’Malley noted there are future plans to expand.
“What we’ve launched with is really a whole new digital banking offering. And at the moment, it’s a transaction account with payment capabilities, but it doesn’t have any lending attached to it yet,” O’Malley said.
“We will get to lending, and so we will get to small business lending and probably some consumer lending down the track as well.”
Currently, AMP keeps its home loan and business loan services separate. The mortgages side will continue to remain broker-centric.
“We’ve got an existing bank, which is … a home loan-centric bank, mostly mortgage broker-initiated. This is separate to that … think two divisions, one bank. This new digital bank and the existing home lending centric bank. We’re going to continue to invest in both. But today’s is very much small business, personal transaction and payments capabilities, no lending as yet,” O’Malley added.
“So, we anticipate doing some additional small business-focused lending throughout the year and at some point through this year, probably in the first half … we’ll bring some lending to the market as well.”
While the residential mortgages side will continue to have strong broker involvement, with a reported 92 per cent of loans coming through third party, the business side will have a stronger proprietary focus.
“Brokers make up such a huge part of the market. And for AMP, we’re about 90 per cent, 92 per cent of our flow in home lending is mortgage brokers and so really important partners, really important channel, going to continue to invest in that.”
“We’re doing a lot of work on the digitisation and improvement of that origination journey for brokers, that’s going to continue.”
“We absolutely think that in the smaller business space, for deposits, payments and probably some smaller lending, that’s less broker sweet spot. And so, we anticipate that to be more direct,” O’Malley said.
O’Malley anticipates more consumers coming direct for the smaller business loans, which was a key reason for the proprietary prioritisation. Another cause for this push was a “gap in the market”.
“Small businesses, and particularly mini or micro-businesses, solopreneurs, side hustlers, start-ups, they don’t think the big banks are doing a good job looking after them, looking after understanding their needs,” he said.
“And so, we started with that in mind. There’s an opportunity there – 2.4 million small businesses, [they] really are the engine of Australia. We think [there] is a real opportunity there. And then we looked … [how we could] best serve those customers.”
“This great tech allows us to be agile and nimble and move fast, deliver a really great experience and really address that gap in the market that we saw.”
The digital banking service is available now for customers: “Our ambition is to help small business owners – sole traders, side hustlers and other small businesses – seamlessly run and administer their business from the convenience of their mobile phone.
“Today’s launch is just the beginning, with AMP Bank set to announce a range of new partnerships and features over the coming months,” O’Malley said.
